BusinessDay... the voice of business: Stockbrokers push for capitalisation harmony with world markets

Stockbrokers push for capitalisation harmony with world markets
================================================================================
MADUKA NWEKE on 11 May, 2008 02:00:00
 
The visit of the Senate Committee on capital market to the Nigerian Stock
Exchange (NSE) has revived  stockbrokers’ agitation for the reduction of N1
billion capitalisation pegged by the apex regulatory body.
Investigation around the stockbrokers revealed that the stockbrokers argue
their points on the ground that stockbroker’s capitalisation world over has
not been up to N1 billion naira equivalent. They posit that the level of growth
of the Nigerian capital market has not reached N1 billion capitalisation for
stockbrokers.
According to some stockbrokers who chose to be anonymous, the benchmark for the
capitalisation is high even though some of the firms have already braced the
tape. They said that apart from the fact that such capitalisation would
introduce new line of fraud, the smaller investors would shy away from using a
go-between to buy their shares.
The group argues that Nigeria is not the largest stock market in Africa, yet
they are pushing their stockbrokers’ capitalisation above board.
However, the stand of the regulatory bodies has remained that stockbrokers
should upgrade their capital base, to enable them carry out services that meet
the market development.
It will be recalled that the market capitalisation and the index have continued
to dwindle in appreciation since Monday April 28 2008. On that date, the market
capitalisation was at 11.623trillion, while the All Share Index stood at
60,122.77 basis points.
On Tuesday April 29, Market Capitalisation dropped to 11.534 trillion and the
All-Share Index dropping to 59,663.22 further on Wednesday April 30, to 11. 491
trillion and All-Share Index leveled at 59,440.91 basis points. The market drift
continued as the capitalization again on Friday May 2, dipped to 11.430 trillion
while the All-Share Index recorded 59.124.87.